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City Treasurer Phil Molina. (Photo by Chris Frost)
Monday, February 3, 2020

By Chris Frost



Oxnard--The story about the City of Oxnard voting to sue Aaron Starr and Alicia Percell, continues with Russ Branson from Russ Branson Consulting discussing the finance director/ the elected city treasurer, and if the initiative passes, who will design the system of controls in the city instead of the finance director, Kevin Riper. 


The council voted to put one ballot initiative, permit simplicity, on the ballot this Nov., but sued Starr over the other three.


Starr, Percell, and their group "Moving Oxnard Forward" engaged in an extensive signature-gathering effort in 2019 and certified five ballot initiatives including:


• Road Repairs – Requires city hall to improve city streets and alleys over time as a condition for continued collection of "Measure O" sales tax.

• Transparency – Makes the elected City Treasurer accountable for the city's financial functions; requires the online posting of city expenditures and their supporting documents; requires the finance department to hire a certified public accountant and publish monthly financial statements; and requires the publishing of performance measurements for city departments.

• Open Meetings – Requires city council and other city legislative bodies to meet no earlier than 5:00 p.m. (with a few exceptions); requires training on the use of Robert's Rules to enable better-run meetings; requires advance videotaping of staff presentations to allow more time for public comments; and expands the right of the public to comment on agenda items and make use of video presentations.

• Term Limits – The Mayor and the City Council to be limited to two consecutive terms, requiring a two-year break before becoming eligible to serve again.

• Permit Simplicity – Implements a program that will enable the city to issue permits in a single day, making it easier for business owners to bring higher-paying jobs to Oxnard and for homeowners to improve their homes. Similar programs have been successful in other cities.


"The City Council may establish controls as long as they don't undermine the plenary authority of the director of finance," Branson said. "I had to look up what is plenary authority."


Plenary authority, he said, is a wide-ranging power that is often construed and limitless.  


"To me, the goal of this is to give the elected treasurer plenary authority over finance and the treasury," Branson said. "As long as you don't impinge on that, you can do whatever you want."


The city contracts with Price Paige for its internal auditor, and it has a whistleblower program also run by the company.


"What this does is the person who is selecting the auditor is also the one the auditor will most likely be auditing," he said. "It's a recipe for corrupt practices. Not that anyone is corrupt now, but you like to have a separation of duties. You always put people in a position where there is someone else who has some oversight over them. This takes that oversight away."


The city attorney and treasurer should report any findings of malfeasance or criminal conduct.


"Okay, this is one they should do," he said. "All city staff should do that. City Council, if you know something, you should report that. I'm not sure what this does or what this is trying to do, but this is something that should be done. Frankly, you're most likely to have financial malfeasance in the treasury or finance areas."


Financial transparency is something the city wants to do, Branson said, but can't because of the current budget system they are replacing.


"It's not that they can't do that," he said. "To do that would require additional city staff who would have to scan thousands of documents. Do you have the money? You just laid off 20-30 positions this past year. Some things are going on here that the city is working towards. When you talk about disclosing submitted bids, what you’re bidding for is already out there. Professional services, which are generally chosen based on qualifications and not price, if you're putting all the bids out there, it can lead to some confusion. You're not buying a widget; you're buying a professional service. You want the best person, group, or firm, whoever that is. Sometimes, that might cost a little more."


The initiative requires the director of finance, the city treasurer, shall provide performance measurements about the department's core functions with no fewer one performance measurement based on cost, one based on quality, and one based on timeliness. 


"This initiative isn't what you want an elected member of the city to do," Branson said. "The city manager has responsibility for this, but the city manager will depend on input from the staff. You do have performance measures right now in your department by department."


Measure O Initiative


This initiative ties the half-cent sales tax collected by the city to the streets and alleys.


The initiative is tied to the pavement condition index (PCI), and if the city doesn't achieve an 80 percent PCI. Measure O will terminate.


The PCI measures the condition of streets and alleys. Higher numbers mean better streets.


Currently, the city has 61 PCI. In 2018, the city scored 63 PCI. The number places the roads in fair condition.


"This is a problem that every city, not just Oxnard, faces," he said. "Tying it to Measure O is an issue."


Measure O passed by 65 percent of the voters, he said, which makes it a general tax. If it was a special tax that requires two-thirds approval, it missed that level. If it got two-thirds approval, it would still be a general tax.


"This was the purpose, to protect, maintain and enhance vital services, including police, fire, emergency response, increasing street paving pothole repair, traffic flow, and expanding youth services, and so on," he said.


The city could try and meet the PCI levels, and it would need to dedicate 100 percent of the Measure O money to the roads.


"Plus, you'd have to divert about $204 million from the general fund and the gas tax fund, if you can get that, to the roads, as well," Branson said. "It's everything that Measure O gives you, plus another $204 million to make that work. That makes Measure O a special tax for streets and alleys."


The second option the city can choose is to say it can't meet the requirement and let Measure O terminate. That makes Measure O end six years early.


"I would say this undermines the original intent of the voters and makes it a de facto special tax," Branson said. 


Measure O funds "53.5 staff positions, he said, as well as a variety of programs" that reach different areas in the city.


If the city does nothing and Measure O ends, it would have to layoff $79 million of staff salary to make that happen.


During public comments, Christopher Wiliams said the Measure O initiative would have catastrophic effects on the city.


He understands the frustration that some residents have about road conditions.


"This initiative is not the solution, in my opinion," he said. "If you take the time to read what the initiative would do, you would realize that two things are going to happen. All the Measure O money would have to be deferred to fix our roads, or the city wouldn't be able to meet the requirements, and Measure O would no longer exist. What does that mean to public safety if Measure O is gone? To my understanding, Measure O funds 16 peace officer positions and helps support the police department computer-aided dispatch center. It pays down the cost of building Fire Station 8 and funds several firefighter positions."


Philip Molina said we know that a certain mayor was elected and took trips on a private jet from a private developer doing business in Oxnard. He said the mayor visited the developer's private resort at no cost.


"You remember him," he asked. "It's also possible for the council to hire a city manager and city attorney to flaunt the laws by approving a supplemental post-retirement benefit that required council approval. Both of them claim that you gave him approval, and you didn't. While this report states, the staff was interviewed in putting the report together, the elected city treasurer was never interviewed or even asked by the consultant a single question. But in that report, I heard him say, I believe, I believe, I believe, that's not fact. That's personal opinion, that shouldn't be in the report."


Molina said when he was the finance director, and used the same software the city currently has, they were audited by KPMG. The finance staff prepared and submitted monthly financial reports to the council and the public budget that showed actual to budget data and marked the department's accomplishment.


"We did have three CPA's on staff, and one of them was me," he said. "Recently, I was one of the members of the public that pushed and pushed the council to do a contract for an independent internal auditor. I supplied the current IIA with information and intended to make Oxnard a better local government. I've been a state department insurance auditor, I've been a chief financial manager for Loa Angeles Children's Services, and I have been a Chief Financial Officer for local government in California for over 35 years. Yet, I was not asked to be part of the objective report that was given to you.  This less than objective report was self-evident when within the first few pages, he states one of the most troubling aspects of this initiative is the emergence of the single elected position. The current system can produce bad operators, but the proposed system would at least allow the public a more clear immediate and direct ability to show their disgust or their dislike for the elected treasurer if she or he does perform by doing a recall. As far as transparency, I believe each of you and the public can attest to the difficulty I've had trying to get the list of checks the city writes every week to the public. I've also had problems getting the payroll detail wich the law says you're entitled to. I certainly stand on my position to make every aspect of local government transparent to the taxpayers, who pay our salaries."

Aaron Starr said after reading the 9212 report; he brought a fire extinguisher in case someone's pants catch on fire.

"The city's report overstates the cost of maintaining the streets at acceptable levels," he said. "On page 38, the report concedes that money does need to be spent to bring up the quality of the roads, but nowhere does it state how much money needs to be spent to maintain the roads at the lowest lifecycle cost. These are the reports previously presented to the city council. Back on July 18, 2017, city staff stated on page 2 of their report that to maintain the condition of streets and alleys at a pavement condition index of 57 at the time would require $12 million a year. That same page states that the critical PCI rating of 55-70, the point at which the streets start to deteriorate rapidly, the maintenance costs increase greatly. It is the most cost-effective to maintain the streets before the condition reaches the critical PCI range. Figure two shows the ideal PCI range of 75-80. We know from staff reports that it is less expensive if you maintain streets at the ideal level. On Oct. 25, 2016, city staff presented another report, also prepared by Pavement Engineering Inc., by the way, that stated on slide six that you can spend a dollar today, or you can spend $8 down the road.  On slide 8 (on the report), you can see that regular maintenance is not only cheaper, but it maintains the roads in better condition. Spending $2.85 per square foot over time can result in an average PCI of 79 while performing minimal maintenance and having to reconstruct the street completely can result in a much lower PCI of 68, at a much higher cost of $4.54 per square foot."


Ray Blattel said when you don't like something, you will spin it any way you can to make it smell.


"Rather than un unbiased report, the theme of this report, to me, seems leading and influencing," he said. "Relative to the treasurer expansion initiative, regarding the statements on page 7, from the findings and declarations from the initiatives, there is no one elected official explicitly accountable for the city finances. The response was that the six council members and the mayor do that now. The argument is if the city treasurer is elected and performs that function, we are stuck with that person for the election term. Isn't that the same situation we have now with the seven elected council members? These people aren't infallible either."


Oxnard Chamber of Commerce Cheif Executive Officer Nancy Lindholm wishes that all the voters could have heard Mr. Branson's report.


"It hits you in the face when you see the fiscal impact and some of the what if this happens," she said. " I find it absolutely amazing that one or two people can put this city between a rock and a hard place. One of those people has already been rejected by the voters twice. To be honest with you, the word extortion comes to mind." 


Permit Simplicity


Community Development Director Jeff Lambert reported on the Permit Simplicity Initiative and reminded the council that he has 20 years of experience as a community development director.


Lambert said his staff put the work into the research of the city's process and also looked at other cities, and how they processed these types of initiatives.


"The focus of this report was less about how it would impact our world, and more about how this would impact our customers," he said. "We tried to focus on administrative impacts, and that includes safety impacts."


According to the initiative, every project in the city would be eligible for permit simplicity. Lambert called that an "unusually broad list" compared to other cities.


Architects, civil engineers, landscape architects, soil engineers, fire professionals, and other licensed professionals who attend the class and testing from the city and pass would receive certification to self-certify.


The City of Oxnard would need to put together the self-certification program.


"It also has a structural peer review," Lambert said."Other cities have other kinds of peer reviews, and this one only has a structural peer review. Any application that requires a structural engineer, we would have the ability to review that portion of the application."


Approximately 35 percent of the plans that go through a plan check has a structural engineering requirement.


"It does require us to create a building board of appeals," he said. "The job of the board of appeals would be to appeal the decision of a building official."


The city can revoke permits if it feels the permit got issued in error.


"It also allows for field revisions based on voluntary changes by the contractor, or mandatory changes by the inspections we would do during the construction."


Lambert said few cities use permit simplicity to compare with.


The most well-known city is Phoenix, Arizona.


Elk Grove and Sacramento County California are the next two examples, he said, but those programs had more limitations than proposed for Oxnard.


"Both of those cities no longer use this system," he said. "They put it in place and found it was not productive."


During council comments, Vianey Lopez said she is concerned about all three measures discussed.


"I understand the possible intent of those who initiated these measures and gathered these signatures, but I think there are other ways that we can bring about these changes," she said. "I can personally say that up to today, those individuals, Mr. Starr, if you wanted to have a conversation, I have not been contacted."


Mayor Pro Tem Carmen Ramirez is also concerned about the initiatives and said Oxnard is a city that is not affluent.


"Last year, we found that Measure O was our lifeline to save fire services," she said. "We still had to layoff people. It was a terrible day. It was one of the worst days I've ever had a councilmember. It is true that we have elections, and elections have consequences. I think what we're looking at here is to take away the representative form of government totally in our city. If you do not like the council people, you have options. We've had a recall, thanks to a gentleman in the audience. The people spoke, and we are still here. We're making decisions to the best of our ability for our residents. I'm concerned that the low information voter, people who are frustrated with good reason about a lack of resources in the city, will think that these initiatives are the way to go to solve our problems. It looks like these measures are someone's hobby. I don't understand."


She also expressed concern about the city treasurer taking control of the entire budget process.


"That is not what the residents want," she said. "They want to have input. The council members are their elected representatives."


Councilman Oscar Madrigal said the ballot initiatives are not in the best interest of the city's residents.


"Mr. Starr did get enough signatures, and they should go out to the voters," he said. "Hopefully, the voters make the right decision at the ballot box."


Councilwoman Gabriela Basua is upset, and she can't believe the council is discussing the initiatives.


"As somebody who sits here as your elected official, and somebody who works in government, this is the most reckless thing I have seen in my 18 years of government," she said. "Wow! The fact that we are spending our tax dollars to get information from a consultant on how reckless this is, wow. It is obvious that the people who put this to us today have no concept about what it takes to run a government."


Councilman Bert Perello opened his comments with Measure O and if it was passed as a general tax and not a specific tax and how it will be continued because it would go to just the streets.


"I'm an elected official, and I put my pants on the same way you do," he said about the expanded role of the treasurer. "I'm a resident in the City of Oxnard; I am over 18, I'm not in federal prison, I'm not on parole, and someone has not declared me mentally incompetent. That's all it takes."


He said the 9212 report sounds like the worst-case scenario.


"I agree with a couple of points that Mr. Molina brought up," he said. "Why don't we have the list of checks for the public to find out what we spend?" 


Mayor Tim Flynn said at the core of the initiatives is the belief that the city manager, council, and staff continue to engage in corruption and mismanagement that the city council ended.


"It's a story that the author of these initiatives continues to propagate to the people of the City of Oxnard," he said. "This individual is attempting to convince the public that this city council is corrupt. The city manager is corrupt.  Not only is the city government corrupt, but everybody is incompetent. They're cloaked as if they're democratic reforms."


Flynn praised the author of the initiatives and said he admires him and thinks he is an intelligent person.


"He's not more intelligent than the public works director, the finance director, the recreation director, the council, the mayor, and the city manager, combined," he said. "That's what these initiatives reflect. I am more intelligent than all of you who serve. I have a monopoly on the truth."